Real Estate Questions and Answers from the Fredericksburg Consumer

What is the difference between a real estate agent and a real estate broker?

Most states require real estate sales professionals to be licensed by the state, so that they can control education and experience requirements and have a central authority to resolve consumer problems.

The terminology used to identify real estate professionals varies a little from state to state.  Brokers are generally required to have more education and experience than real estate salespersons or agents.

The person you normally deal with is a real estate agent or salesperson.  The salesperson is licensed by the state, but must work for a broker.  All Fredericksburg Homes are placed in the broker's name, not the salesperson.

A broker can deal directly with home buyers and sellers, or can have a staff of salespersons or agents working for him or her.

Why should I use a real estate salesperson?

A Fredericksburg real estate salesperson is more than just a "sales person." They act on your behalf as your agent, providing you with advice and guidance and doing a job - helping you buy or sell a home. While it is true they get paid for what they do, so do other professions that provide advice, guidance, and have a service to sell --such as Certified Public Accountants and Attorneys

The Internet has opened up a world of information that wasn't previously available to homebuyers and seller. The data on listings available for sale is almost current - but not quite. There are times when you need the most current information about what has sold or is for sale, and the only way to get that is with an agent.

If you're selling a home, you gain access to the most buyers by being listed in the Multiple Listing Service. Only a licensed real estate agent who is a member of your local MLS can get you listed there - which then gets you automatically listed on some of the major real estate web sites. If you're buying or selling a home, the MLS is your agent's best tool.

However, the role of an agent has changed in the last couple of years. In the past, agents were the only way home buyers and sellers could access information. Now agents are evolving. Because today's home buyers and sellers are so much better informed than in the past, expertise and ability are becoming more important.

The real estate agent is becoming more of a "guide" than a "salesperson" -- your personal representative in buying or selling a home.

I want to buy a home in Fredericksburg. I know the property and the seller has an agent. Do I need my own agent or can I negotiate a lower fee if I act as my own agent?

If you have to ask this question, you probably don't have the necessary knowledge to properly represent yourself.

The seller pays the real estate commission, not the buyer, and real estate commissions are already set in the listing contract. It doesn't cost you anything extra to have your own agent represent you because the seller is already paying for it.

If you don't have your own agent, the seller's agent will often represent both you and the seller as a "dual agent" or just represent the seller. This means the agent either has divided loyalties or is working for the seller, not you.

In this situation, since there is only one agent to be paid, sometimes you can get a reduction in price by getting the agent to accept a lower commission from the seller. However, you have to realize that you are interfering in what is essentially an agreement between the agent and the seller -- and something that has already been negotiated and agreed upon.

The seller can get the same gain on a lower price if they have to pay less commission. At the same time, the agent is not going to be willing to cut the commission totally in half because - since you don't have an agent - they are going to be doing some of the work that your agent would normally be doing (whether you realize it or not).

And you'd better know what you're doing – because the listing agent isn’t going to be on your side. If your offer causes them to reduce their commission from what the seller has already agreed to -- that agent isn't going to be real happy with you.

What is a buyers agent, what does this specifically do for a buyer and who usually pays this "buyers agent"?

On most transactions, there is usually a listing agent and a selling agent. The selling agent is sometimes referred to in media as the buyer's agent, because he works on the buyer's behalf and it easier than explaining each time that the "selling agent" is not the listing agent and is actually the buyer's agent.

There are some agents that market themselves as "buyer's agents," "exclusive buyer's agents," buyer's representatives," and so on. Mostly it is just marketing. At the same time, part of it is because they want to accentuate the reasons a buyer should not go directly to the listing agent when they purchase Fredericksburg real estate. This has to do with agency.

See, if a buyer goes directly to the listing agent, they are dealing with an agent that has conflicting responsibilities. Their job is to get a good price for the seller and they may not zealously represent the interests of the buyer. Those who market themselves as "Buyer's Agents" indicate they are only working for the buyer in a real estate transaction.

The commission is still paid by the seller, no matter what they say in their marketing (with extremely rare exceptions). They either get paid directly by the seller or set up the transaction so that the seller provides a "credit" to the buyer for how much the real estate commission is -- then the buyer pays the commission.

No matter how it is set up, the buyer still walks away with the house and the seller still walks away with 94% of the purchase price.

I looked at a Fredericksburg property yesterday with a realtor who quite obviously has no clue what he is doing. I really want to purchase that Fredericksburg house, but don't want the hassle of working with an agent who doesn't know his business. Can I switch agents and still buy that house?

If you want to purchase that property, the only ethical thing is to purchase it through that Realtor. Otherwise, you could set up potential conflicts between your previous agent and whatever new agent you may choose.

You see, if your previous agent finds out you purchased the home with a new agent, he may want to claim all or a portion of you new agent's commission.  This could develop into a "battle" involving real estate agents, offices, managers, brokers, and attorneys.

You may be able to resolve the issue by letting your current agent know you have misgivings about their expertise and ask if a more experienced Realtor from his office can be aboard as your advisor, too.

That is the only ethical way I can think of to handle your situation.  It isn't "your" ethics I mean, but the ethics of the two agents.  One agent isn't supposed to make an offer on a property you have already previewed with another agent.  It happens, but it isn't ethical without some sort of disclosure and agreement between the parties.

I want to buy a Fredericksburg home and approached two different real estate agents. One was very informative, handed us brochures, especially on the real estate law and the responsibility of the agent. The other was very informal, made a lot of gestures, and presented nothing in writing.

Agents are all different in their style and how they deal with people. Some are formal and some are informal. That doesn't necessarily have anything to do with their knowledge and ability. Go with who you like and who you trust.

My Fredericksburg home has been listed with an agent for over three months and I’m not happy. What options do I have?

All listing contracts have expiration dates. When is yours?

If it is not coming up soon, tell the agent and/or his manager that you want to cancel your listing. Often they will let you cancel easily, since they do not want to build ill will in the community.

If they won't, you can always pull your home off the market until the listing contract expires.

Can you negotiate the price of a bank owned home in Fredericksburg?

Everything in real estate is negotiable. However, banks are more sophisticated about pricing than they were years ago. So those "Get a great deal on a foreclosure!" days aren't what they used to be. Lowball offers generally don't go very far.

How would I go about finding someone to finance a sheriff sale property?

You don't.

You have to show up with a cashier's check or certified funds. I suppose if you had another asset that you could borrow against AND you could get a loan large enough using that asset as collateral, you could do it that way. But you're actually financing the other asset and not the foreclosure property.

If the purchase contract states that the seller is paying for the hazard report and a buyer's home warranty, who is responsible actually ordering them?

Probably, you'll both have to agree. But home warranties don't vary that much in price, so the seller shouldn't mind if you order it. The seller will probably want to order the hazard report, assuming that you mean checking for radon gas and things like that.

New Construction: If a walk-through inspection reveals a problem, but I choose to go through with closing anyway, can I retain a percentage of the down payment (or mortgage amount) - - not to be paid until the repairs are made?

If you want to go through with closing, you will not be able to hold any of your money back or the lender will not fund the loan. You just have to trust that the builder will make the changes, and they normally do.

What are the terms of the pest inspection? If after a few years you are living in the home, are the sellers responsible if termites are found?

Assuming you had a pest inspection performed when you bought the house, the terms of the guarantee would be with the pest inspection. You will probably find it with your other documents from when you bought the house.

Expecting the seller to be responsible for something a couple of years after the fact is not really sensible. The only way a seller should be liable is if they knew of an infestation, but did not disclose it.

What should I be aware of that the house inspector should be doing during the inspection of the house I am interested in buying?

The Inspector should be checking the following things:

• Drainage
• Foundation
• Roof & Water Leaks
• Paint
• Plumbing
• Wiring
• Heating
• Fireplace
• Tile

I am interested in buying a home which the seller is listed "as is." Will a bank require a home inspection before approving a loan? Will a bank approve a loan on home needing repairs?

A bank doesn't require you to get a home inspection in order to obtain a mortgage. If there are obvious major problems that affect value, the appraiser may note it in the appraisal report. However, their job is not to inspect the home, just to determine value.

Although the bank doesn't require a home inspection, if your purchase contract mentions a termite report, the lender will require that to be performed and pass before you close.

A termite report lists more than pest infestations. It also mentions obvious structural defects, such as wood rot, etc. These are classified into two groups - category 1 and 2. All items in category 1 must be repaired prior to closing. However, the lender does not stipulate who must pay for those repairs. Contact Tom Smith at Fredericksburg Homes for Sale for your very own questions.